Gov. Arnold Schwarzenegger and California's legislative leaders achieved the most difficult job imaginable - bridging a $26.3 billion shortfall - in the most tortuous way possible. The refusal of the governor and Republican legislators to consider new taxes all but guaranteed that the solution would require a combination of excruciating cuts, buck passing and a dash of accounting gimmickry. And the deal announced Monday night contained all three.

But before we get into the ugly details, let us pause a moment to praise the governor and top legislators for finally mustering the mettle to perform this grim duty before the Golden State plummeted into insolvency. As awful as this deal might be for Californians who work for the state or depend on its help in finding a job, going to college or getting basic health care ... this is not nearly the nightmare that would have resulted from continued gridlock. California has reached the point of issuing IOUs and watching its nation's-worst credit rating sink to near junk-bond status.

Without this deal - which still must pass both houses of the Legislature - the state will keep sliding toward insolvency, with each day adding $25 million to the gap between spending and revenue.

So for all the interest groups that want to pick apart this compromise in the name of saving your favorite program, we ask: Where is your solution that would survive the current political reality of Sacramento? The Republicans remain united against any new taxes - and it would take at least a few of their votes to reach the required two-thirds threshold. It seems that many of them would sooner see their children in second-rate schools and their cars on Third World roads before they would break their anti-tax pledges and put themselves at the mercy of the right-wing talk radio blowhards.

It's a sad commentary on the state of governance in California, but it is a reality the Capitol's voices of responsibility must confront.

"I'm just glad that once we have this passed and the governor signs it, the IOUs can stop ... that is huge," Assembly Speaker Karen Bass said Tuesday. She also said she "feels good" about tempering Schwarzenegger's plans to cut deeper into education and to dismantle a welfare-to-work program that has proved successful.

"I'm feeling a sense of relief, but it's sobering because of some of the decisions we had to make," said Senate President Pro Tem Darrell Steinberg. "And yet I feel very strong and very proud of all that we fought for, and what we protected. It could have been so much worse."

It must be noted that this deal also rests on an element of hope that the economy does not sink further. For now, at least, the governor and four legislative leaders have stepped up with a tough but essential step to keep the state afloat.

Inside the deal: Pain, gain, gimmicks

The gain

-- Disaster averted: A cash shortfall has been forcing the state to issue IOUs for only the second time since the Great Depression. The state treasurer had warned that California's credit rating was deteriorating to the point that it would soon lose its ability to build roads and schools.

The pain

-- Education: $6 billion in cuts to K-12; $3 billion to higher ed.

-- Safety net: $528 million to welfare-to-work; $1.3 billion to Medi-Cal; $124 million for child health care; $226 million for in-home care for the elderly and disabled.

-- Transportation: $1 billion.

-- Prisons: $1.2 billion, which would involve alternatives to incarceration for 27,000 inmates.

The gimmicks

-- Borrowing: $4.7 billion from cities, counties, special districts.

-- Payday deferral: $1.2 billion by shifting a payday to July 1, 2010.